March 24, 2020
As I write this, Harris County Judge Lina Hidalgo is on the television announcing the “Stay Home, Work Safe” order for all of Harris County, my dogs are barking in the background, and I’m looking at the mountain of information before me and all of the differing opinions of how this is all going to go in the coming days, months, and years. It seems like every time I go to write, a new stimulus package is proposed or shot down, new evidence comes out about how the spread is slowing or actually getting worse, and a new political figure or agency discusses changes in policy.
How are we supposed to manage through this?…take a deep breath, here we go.
You can only control what you can control, start there.
1. Rent Considerations
We don’t have enough evidence to say how long this will last or what total impact will be, so we need to do the best with what we do know. Unfortunately, we know a lot of people are out of work, either due to temporary office, restaurant, and bar closures, or more permanently due to layoffs. This means many renters will not be able to pay on time and might not be able to pay rent in full. Property owners should be proactive with their tenants. Find out if the tenants are experiencing payment concerns already, work with those that are on payment plans or potential concessions if able.
At AAM, we have proactively asked every house we manage to let us know if they are experiencing pay issues. Understandably we have had several say yes and are actively working with them and the property owners to manage the situation as best we can. Does this mean more work? Yes. But it sure beats the alternative of getting into the middle of April without rent and having no idea when or if it will come.
On a worst case basis, some tenants will not be able to pay rent, even with a payment plan. An eviction, though difficult, could have to be an option down the road. Currently no civil courts are hearing eviction cases through April 20. This could be extended. But still going through the correct legal procedure of issuing 3-day notices to vacate and filing an eviction are important steps in order to ensure that when eviction cases are heard, yours is top of the list.
2. Leasing Considerations
If you have a vacant house, go in with the mentality that it will take longer to lease than in normal circumstances. Sure, your house could lease in a day and prove me completely wrong. But wouldn’t you rather be positively surprised than expect this to be business as usual?
Open houses are not going to work, they’re for all intents and purposes barely legal right now. Showings are tough as well due to social distancing considerations. However, virtual tours and allowing self-showing are options. A couple years ago the Texas Real Estate Commission (“TREC”) made it legal for tenants to see houses without a Realtor. At AAM, we have been hesitant to allow this, but desperate times call for desperate measures. We have now gone to several properties to unlock the front door for a potential tenant, sit in the car and wait for them to get done looking, then lock up when they’re done. We’ve even been on the phone or Facetimed with some in order to do more of a virtual tour. Is it ideal? No. But we have to work with what we have and still keep everyone safe.
Real estate services and property management services fall under essential services as defined by Homeland Security. Therefore, we are able to complete these services during the various shelter in place mandates. However, we recommend practicing social distancing and only leaving the house when absolutely necessary to complete the job.
3. Repairs & Renovations
Similar to real estate services, repairs and maintenance can be essential services. In the current environment, they really need to be essential repairs though in order to justify sending someone into an occupied home. Examples of essential repairs are things like leaks, broken windows or doors, or HVAC failures in hot or cold climates that could quickly lead to further damage to a house or worse, safety concerns. These are all legitimate repairs that tenants should not hesitate to ask for.
We recommend again being proactive with tenants. At AAM we asked tenants at all of our managed properties to please only request work orders that are urgent at this time. We are also requiring that tenants put in writing that nobody in the house is experiencing a fever or other symptoms of COVID-19. Safety has to be of the utmost consideration in every aspect of our lives.
4. Tax filings
One thing I will actually commend the government on is that the IRS has consistently delayed tax filing deadlines in times of crisis. The new 2019 filing deadline is July 15, 2020 across the board. At first the filing deadline was still April 15 and the payment deadline was July 15. Luckily the IRS within a week of that announcement moved the filing date too. At least one less thing to worry about in the month of April.
5. Be attentive, responsive, and kind
This mantra was popular during Hurricane Harvey. Harvey was a devastating natural disaster causing at least $125 billion in economic damage, some estimate even up to $190 billion. Entire neighborhoods were destroyed, and almost 3 years later, many of those have yet to be rebuilt. Some probably never will. But what sticks out in many people’s minds is how we all pulled together. People from all over the country came to help out where they could, neighbors provided food and shelter for each other, and people donated food, household items, and time to make whatever difference they could.
We have made it through Harvey and several other floods. We have weathered the ups and downs of the oil and gas industry and still remain one of the most prosperous cities in the world. This is not easy. This is another disaster of a very different nature. But we will make it to the other side. Be attentive to each other’s needs, be responsive, and be kind.